With the XRP price struggling to reclaim the $1.50 level, market sentiment has turned negative, leading to significant sell-offs. In response, pundit and staunch XRP supporter Max Avery has issued a warning to investors, labeling panic selling as an "expensive mistake." Avery argues that selling XRP to take profits not only risks losing one's position but also triggers a taxable event, with capital gains taxes ranging from 15% to 37% depending on jurisdiction. Furthermore, investors would then face the difficult task of timing the market to re-enter.
Avery proposes an alternative strategy: borrowing against XRP holdings. This approach allows investors to access cash without selling their tokens, thereby avoiding a taxable event and maintaining exposure to potential future price appreciation.
The warning comes as XRP faces concerning market metrics. Data from Coinglass reveals a dramatic crash in open interest (OI), dropping from a peak of over $10.8 billion to below $3 billion. This contraction indicates waning trader participation and conviction. Similarly, daily trading volume has notably declined, trending below $10 billion in recent months—a stark contrast to the $78 billion recorded in late 2024.
Technically, XRP/USD is hovering near $1.44, having rejected from highs above $3.00 earlier in the cycle. Momentum indicators like MACD and RSI are tilting south, and the price chart shows a pattern of lower highs. The volatility in open interest, characterized by large spikes followed by sharp contractions, suggests traders aggressively entered during the rally and just as quickly pulled out, indicating a lack of sustained conviction.
These trends collectively suggest XRP is in a bearish phase, with the easy money from its 2025 rally seemingly over. The asset now faces the challenge of stabilizing and rebuilding trader positioning before any serious discussion of new highs can resume.
